Live Cattle
June Live cattle rallied from the38 % retracement level (111.76) and traded to a high of 113.65 on Monday, April 10, 2017. It couldn’t quite make it to the March 23 high (114.20) as the 21 DMA (113.725) stopped the advance. Price failed from the high and Live Cattle traded down to the low of the day (112.10). It settled at 112.30 and ended the day at 112.15. The trading session formed a Shooting Star candle, which is a bearish formation. A breakdown from the low could see price test support at the 13 DMA (111.225) and then the200 DMA (110.80). The 8 DMA (110.65) is nearby and a failure from these levels could see price approach the 50% retracement level (108.775) of the rally from the October 13 low (96.10) to the January 19 high (121.45). A rally from the low could see price retest Monday’s high and then the March 23 high.
Feeder Cattle
May Feeder Cattle also rallied to resistance on Monday, April 10, 2017. It traded to 136.80, just above the 61.8% retracement level (136.48) of the downmove from the August 9 high (149.975) to the October 13 low (114.65). It failed from the high and Feeder Cattle also formed a Shooting Star candle. A breakdown from the low (134.60) could see the May contract test support at the 50% retracement level at 132.30.There is strong moving average support near the 50% retracement level as the 8 DMA (132.25),13 DMA (132.625) and the 21 DMA (132.025) surround the support level. Price could reverse from this area. A rally from the low could see price revisit the Monday high and then the March 23 high at 137.425).
Lean Hogs
June Lean Hogs continued consolidating around the 72.875 price level on Monday. The trading session was quiet and it formed another inside candle within Friday’s inside candle, setting up the high and low as our pivots. A breakout above the Monday high (73.425) could lead to follow through to the upside with a test of resistance at 74.60 and then 75.325. A breakdown form the low (72.35) could see price test support at 71.275 and then the 50 DMA at 70.55.
For those interested I hold a weekly livestock webinar on Wednesday, April 12 at 3:00pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
www.walshtrading.com
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.